ECB Interest Rate cut means tracker mortgage holders can now save around €360 in repayments each year

Householders with tracker mortgages are due to benefit from a European Central Bank (ECB) rate cut tomorrow and a further special once-off adjustment in the interest rate off which their mortgages are priced. The combination of the two reductions will save a typical tracker homeowner around €360 a year in repayments.

In June, the ECB cut its refinancing rate, off which tracker mortgages here are priced. It came down by 0.25 percentage points to 4.25pc. And later this month, tracker holders are in line for a special 0.35 percentage point reduction when the ECB makes a technical adjustment to its interest rates. The rates reductions combined, will give tracker holders a total reduction of 0.60 points.

There are 180,000 customers with ­tracker mortgages, which is around a quarter of the mortgage market. Homeowners with trackers had been the worst hit by the ECB hikes.

Variable and fixed rates may not come down on the back of the ECB’s rate-cutting move this month. This is most likely because recent cuts in fixed and variables by AIB, Haven, EBS, Bank of Ireland, PTSB and Avant Money had “priced in” June’s rate reduction and the one due tomorrow from the ECB.

Talk to us to find out more on 071 9194194 or email mortgages@obg.ie